The French Ministry of the Economy and Finance plans to step up controls to combat the multiple holding of regulated savings products such as the Livret A, the Livret de développement durable et solidaire (LDDS), the Livret d'épargne populaire (LEP) and the Plan épargne logement (PEL).
Tighter controls to close duplicate accounts
By law, every French person can only hold one Livret A passbook. The same applies to other regulated savings products: it is strictly forbidden to hold two Livrets de développement durable et solidaire, two Livrets d'épargne populaire and two Plans épargne logement.
Most of the time, failure to comply with this rule is due to an oversight: it's not uncommon, for example, for a parent to open a Livret A account for a child, and for the child, now an adult, to open a Livret in turn, without even knowing that he or she already had one. This oversight is punishable by a fine of 2% of the amount outstanding.
Since 2016 and the application of the Eckert law, banks and insurance companies have been obliged to identify inactive life insurance contracts and bank accounts every year. They must then remind their holders of the existence of these contracts and accounts.
If there is no activity on an account for 10 years (the period is 20 years for a PEL, and 3 years if the holder is deceased), the balance is transferred to Caisse des Dépôts. Between 2016 and 2018, the application of this law made it possible to identify 1.5 billion unclaimed euros dormant in Livrets A, LEPs or LDDSs.
But the government wants to go further, and a decree to this effect appeared in the Journal Officiel on March 14, 2021. It transfers to banks the responsibility of checking with the tax authorities, before allocating a new regulated savings product to a customer, that he or she does not already hold a similar product with another banking establishment.
Easier access to Livret d'épargne populaire savings accounts
Bercy also intends to simplify access to the Livret d'Epargne Populaire savings account, which is not very popular with the French. Of the 15 million people eligible for this regulated savings product, only 7.3 million LEPs have been opened.
Like the Livret A, LDDS and PEL, profits generated by the LEP are exempt from social security contributions and income tax. Its opening is subject to income conditions, which must not exceed a certain threshold.
The LEP ceiling is set at 7,700 euros, excluding interest, compared with 22,950 euros for the Livret A and 12,000 euros for the LDDS. Since February 1, 2020, its interest rate, set at 1%, is more attractive than that of the Livret A and LDDS, at 0.5%.
Until now, people meeting the eligibility criteria had to provide their bank with their most recent tax or non-tax assessment, and provide proof of their income each year. From now on, banks will be responsible for carrying out these checks with the tax authorities. The aim is twofold: to simplify access to LEP savings accounts, while making them easier to manage.